A Comment -- General Comments From an Expert (A Commentary)
COMMENT
S&P hitting 5000 this year? Yes, it's possible the S&P can top 5,000 if the macro news is out of the way and we see strong earnings growth. People are making more and spending more money as more goods come in and this will raise prices--this is the cycle. This can be a dangerous cycle, but strong companies can outperform.
COMMENT
Sectors to buy now? Dividends indicate quality. He started 2022 with energy is his top sector, though it may take a pause for a little while. Financials depend on rates on the longer end. Without a doubt, the Fed is focused on the front end of the curve which is very steep. Technology got hit so hard, so it became attractive and now he's buying it.
COMMENT
The U.S. presidential cycle We're not in a bear market now. 2022 is exactly what happened in 2016--look at the chart. On March 30, 2016, the S&P advanced by that year's end. The problem is that Q2 in 2016 went sideways. Year 2, Q2 of a 16-month presidential cycle is the weakest quarter (going back to 1950). Also, April is the strongest quarter for treasuries. We're entering earnings season. He wants the Nasdaq 100 accelerate with strong momentum above its 200-day moving average.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Markets are slightly less volatile, but this could change quickly. Consistent buying strategy will provide a good average price. Market decline is not always a bad thing, if you are buying in one. ETFs could also be a good way to fill in the gap adn stay diversified. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
He has little faith in the Russian-Ukrainian peace talks, because they have failed before. meanwhile, there are ongoing worries about labour shortages, inflation and rising rates. It's a murky time. Stay conservative and pick your spots. He is diversified by holding recession-resistent businesses. He expects the economy to slow as central banks tame inflation. However, market liquidity remains high despite volatility. He owns Pet Valu, Jameson Wellness and Parklawn because they're steady, recession-proof businesses.
COMMENT
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Inflation could be positive for energy, agriculture and metals. However, rate rises increase the possibility of recession. Demand for metals could then fall sharply. There is also US dollar risk since they are all priced in USD. The sectors are still cheap. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
They are positioning for the slowing of economic growth in 2022. Expect dis-inflationary conditions towards back of year. With this in mind have a diversified portfolio for long term needs - with a variety of asset classes. Sectors to consider are consumer staples, some consumer discretionary, utilities, gold, energy and other commodities, some of the interest sensitive banks. Decrease exposure to the giant techs and other long duration growth equities. Investors have less appetite for risk taking. Commodity trades, and low risk stocks are in favour.
COMMENT
The question was on banks.The government has announced a 1 billion dollar tax on bank earnings. Banks will find offsets for the small percentage loss of profits. They will pass at least some of the costs to their landlords and employees, probably not much to shareholders. Insurance companies will probably follow the same route.
COMMENT
Tech stocks have been on a tear the last two weeks. He's underweight large-cap tech. They can run further, meaning the FAANG, 7-10% further this year, but not PE expansion. He's less confident the high-PE stocks which will remain challenged--not for long-term investors. He believes more in cyclicals and value stocks where there will be PE expansion. He's all-in in the markets.
COMMENT
The economy appears to be strong in terms of low jobless claims and factories being built. Also, inflation was showing signs of rolling over even before the Russian invasion. WTI at $114, which didn't stop economic expansion a decade ago, might be overcome by supply chain bottlenecks that are starting to ease at ports. Yes, there are clouds, but there are positives, too. The market is now focused on the positive. Today's market rise could be a dead cat bounce, but it doesn't feel that way.
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